United States District Court, S.D. California
INDUSTRIAL TECHNOLOGY RESEARCH INSTITUTE, Plaintiff/Counterclaim Defendant,
LG ELECTRONICS, INC., and LG ELECTRONICS U.S.A., INC., Defendants/Counterclaim Plaintiffs, and LG DISPLAY CO., LTD., Intervenor.
ORDER: (1) DENYING ITRI'S MOTION FOR SANCTIONS;
[ECF NO. 162] (2) DENYING AS MOOT LGE'S MOTION FOR LEAVE TO FILE SUR-REPLY; [ECF No. 189] (3) VACATING HEARING DATE
GONZALO P. CURIEL, District Judge.
Before the Court is Plaintiff Industrial Technology Research Institute's ("ITRI") Motion for Sanctions. (ECF No. 162.) Defendants LG Electronics, Inc. and LG Electronics U.S.A., Inc. (collectively, "LGE") oppose. (ECF No. 182.) The parties have fully briefed the motion. (ECF Nos. 162, 182, 185.) The Court finds the motions suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1). Upon review of the moving papers, admissible evidence, and applicable law, the Court DENIES ITRI's Motion for Sanctions.
On August 29, 2013, ITRI filed a complaint against LGE alleging patent infringement. (ECF No. 1.) On October 16, 2014, ITRI filed a motion for summary judgment on LGE's licensing defense. (ECF No. 98.) On October 24, 2014, LGE filed a motion for summary judgment on LGE's licensing defense and LGE's counterclaim for a declaratory judgment of non-infringement. (ECF No. 112.) On December 9, 2014, the Court granted ITRI's motion and denied LGE's motion. (ECF No. 158.) The facts of this case are set forth in full in that December 9, 2014, order. (Id. )
III. LEGAL STANDARD
A. 28 U.S.C. § 1927
28 U.S.C. § 1927 specifically bars an attorney from unreasonably "multipl[ying] the proceedings." 28 U.S.C. § 1927. Under § 1927, sanctions "must be supported by a finding of subjective bad faith." New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989). Subjective bad faith is defined as "an attorney knowingly or recklessly rais[ing] a frivolous argument, or argu[ing] a meritorious claim for the purpose of harassing an opponent." Estate of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986). Thus "reckless nonfrivolous filings, without more, may not be sanctioned." In re Keegan Mgmt. Co. Sec. Litig., 78 F.3d 431, 436 (9th Cir. 1996). Frivolous is defined as "lacking a legal basis or legal merit." BLACK'S LAW DICTIONARY (10th ed. 2014).
B. Inherent Powers
Under the Court's inherent powers, the Court may assess attorneys fees when a party "has acted in bad faith, vexatiously, wantonly, or for oppressive reasons." Roadway Express, Inc. v. Piper, 447 U.S. 752, 766 (1980). However, "inherent powers must be exercised with restraint and discretion." Chambers v. Nasco, 501 U.S. 32, 44 (1991). A specific finding of bad faith is required for inherent power sanctions while recklessness, without more, does not justify inherent power sanctions. Fink v. Gomez, 239 F.3d 989, 993 (9th Cir. 2001).
A. 28 U.S.C. § 1927
ITRI alleges that LGE's arguments were legally frivolous for several reasons, including: (1) LGE's failure to cite Rhone Poulenc, (2) LGE's mischaracterization of Int'l Nutrition Co., (3) LGE's claim that CPT could unilaterally license the '355 patent was contrary to Taiwanese law and the text of the Sharing Agreement, (4) LGE's claim that the recorded assignment was governed by federal common law was at odds with ...